Temporary non-residence flowchart
December 10th, 2015
While every attempt will be made to ensure that information provided is accurate at the time of publication, it should be treated as guidance only and does not constitute legal or professional advice. Tax law and guidance changes frequently and readers are advised to consult the current relevant publication for the most up-to-date information on this topic.
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The harmonised temporary non-residence rules introduced by FA 2013, Sch 45, Part 4 may seem straightforward but, as usual, the devil is in the detail.
The key to the new temporary non-residence rules is understanding when the period of 'sole UK residence' ends and begins. It is this that determines:
- the year of departure
- the year of return
- the point at which the UK resident in four out of the last seven years test is measured
- whether the individual has been non-resident in the UK for less than five years
Where the individual is going to, or arriving from, a country with which the UK has a double tax agreement (DTA), the end and beginning of the 'sole UK residence' may not mirror the result under the statutory residence test and can produce some startlingly counter-intuitive results.
It is vital to understand these rules to advise your client correctly.
This flowchart from TolleyGuidance provides a yes/no decision tree to determine when 'sole UK residence' begins and ends in this situation. To read the accompanying guidance note, which fully explains the rules, and worked examples that illustrate some of the more difficult situations, request a free one week trial to TolleyGuidance.